Experiments touching on market design in the July AER

 The July AER has a number of experiments that speak to market design:

 Online,

How to Avoid Black Markets for Appointments with Online Booking Systems  By Rustamdjan Hakimov, C.-Philipp Heller, Dorothea Kübler, and Morimitsu Kurino*

Abstract: Allocating appointment slots is presented as a new application for market design. Online booking systems are commonly used by public authorities to allocate appointments for visa interviews, driver’s licenses, passport renewals, etc. We document that black markets for appointments have developed in many parts of the world. Scalpers book the appointments that are offered for free and sell the slots to appointment seekers. We model the existing first-come-first-served booking system and propose an alternative batch system. The batch system collects applications for slots over a certain time period and then randomly allocates slots to applicants. The theory predicts and lab experiments confirm that scalpers profitably book and sell slots under the current system with sufficiently high demand, but that they are not active in the proposed batch system. We discuss practical issues for the implementation of the batch system and its applicability to other markets with scalping.

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In rural Malawi,

Pay Me Later: Savings Constraints and the Demand for Deferred Payments  By Lasse Brune, Eric Chyn, and Jason Kerwin*

Abrstract: We study a simple savings scheme that allows workers to defer receipt of part of their wages for three months at zero interest. The scheme significantly increases savings during the deferral period, leading to higher postdisbursement spending on lumpy goods. Two years later, after two additional rounds of the savings scheme, we find that treated workers have made permanent improvements to their homes. The popularity of the scheme implies a lack of good alternative savings options. The results of a follow-up experiment suggest that demand for the scheme is partly due to its ability to address self-control issues.

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In Rwanda,

Recruitment, Effort, and Retention Effects of Performance Contracts for Civil Servants: Experimental Evidence from Rwandan Primary Schools  by Clare Leaver, Owen Ozier, Pieter Serneels and Andrew Zeitlin

Abstract: This paper reports on a two-tiered experiment designed to separately identify the selection and effort margins of pay for performance (P4P). At the recruitment stage, teacher labor markets were randomly assigned to a "pay-for-percentile" or fixed-wage contract. Once recruits were placed, an unexpected, incentive-compatible, school-level re-randomization was performed so that some teachers who applied for a fixed-wage contract ended up being paid by P4P, and vice versa. By the second year of the study, the within-year effort effect of P4P was 0.16 standard deviations of pupil learning, with the total effect rising to 0.20 standard deviations after allowing for selection. 

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and in India,

On Her Own Account: How Strengthening Women's Financial Control Impacts Labor Supply and Gender Norms  By Erica Field, Rohini Pande, Natalia Rigol, Simone Schaner and Charity Troyer Moore

Abstract: Can increasing control over earnings incentivize a woman to work, and thereby influence norms around gender roles? We randomly varied whether rural Indian women received bank accounts, training in account use, and direct deposit of public sector wages into their own (versus husbands') accounts. Relative to the accounts only group, women who also received direct deposit and training worked more in public and private sector jobs. The private sector result suggests gender norms initially constrained female employment. Three years later, direct deposit and training broadly liberalized women's own work-related norms, and shifted perceptions of community norms. 

The race to transact in high frequency trading by Aquilina, Budish, and O'Neill

 High frequency traders are constantly involved in races to trade on existing bids and asks or to cancel those bids and asks as they become stale.  Here's an NBER working paper that let's us look in on the action.

Quantifying the High-Frequency Trading "Arms Race"  by Matteo Aquilina, Eric Budish & Peter O'Neill  NBER WORKING PAPER 29011 DOI 10.3386/w29011  July 2021

Abstract: "We use stock exchange message data to quantify the negative aspect of high-frequency trading, known as “latency arbitrage.” The key difference between message data and widely-familiar limit order book data is that message data contain attempts to trade or cancel that fail. This allows the researcher to observe both winners and losers in a race, whereas in limit order book data you cannot see the losers, so you cannot directly see the races. We find that latency-arbitrage races are very frequent (about one per minute per symbol for FTSE 100 stocks), extremely fast (the modal race lasts 5-10 millionths of a second), and account for a remarkably large portion of overall trading volume (about 20%). Race participation is concentrated, with the top 6 firms accounting for over 80% of all race wins and losses. The average race is worth just a small amount (about half a price tick), but because of the large volumes the stakes add up. Our main estimates suggest that races constitute roughly one-third of price impact and the effective spread (key microstructure measures of the cost of liquidity), that latency arbitrage imposes a roughly 0.5 basis point tax on trading, that market designs that eliminate latency arbitrage would reduce the market's cost of liquidity by 17%, and that the total sums at stake are on the order of $5 billion per year in global equity markets alone."

From the introduction:

"At the center of the controversy over speed is a phenomenon called “latency arbitrage”, also known as “sniping” or “picking off” stale quotes. In plain English, a latency arbitrage is an arbitrage opportunity that is sufficiently mechanical and obvious that capturing it is primarily a contest in speed. For example, if the price of the S&P 500 futures contract changes by a large-enough amount in Chicago, there is a race around the world to pick off stale quotes in every asset highly correlated to the S&P 500 index: S&P 500 exchange traded funds, other US equity index futures and ETFs, global equity index futures and ETFs, etc. Many other examples arise from other sets of highly correlated assets: treasury bonds of slightly different durations, or in the cash market versus the futures market; options and the underlying stock; ETFs and their largest component stocks; currency triangles; commodities at different delivery dates; etc. Perhaps the simplest example is if the exact same asset trades in many different venues. For example, in the US stock market, there are 16 different exchanges and 50+ alternative trading venues, all trading the same stocks—so if the price of a stock changes by enough on one venue, there is a race to pick off stale quotes on all the others. These races around the world involve microwave links between market centers, trans-oceanic fiber-optic cables, putting trading algorithms onto hardware as opposed to software, co-location rights and proprietary data feeds from exchanges, real estate adjacent to and even on the rooftops of exchanges, and, perhaps most importantly, high-quality human capital. Just a decade ago, the speed race was commonly measured in milliseconds (thousandths of a second); it is now measured in microseconds (millionths) and even nanoseconds (billionths)."

The Power of Market Design, by Paul Milgrom and Silvia Console Battilana in Project Syndicate

 Paul Milgrom and his business partner Silvia Console Battilana describe how market design can reallocate scarce resources from spectrum licenses to water rights.

The Power of Market Design, by Paul Milgrom and Silvia Console Battilana 

"Misallocation of scarce resources too often deprives users of them even as others waste their supply. Well-designed markets can overcome such problems by enabling voluntary transactions that allow existing users to retain their allotments while enabling higher-value uses.

...

"Many of the world’s existing rights to fresh water – both surface water and groundwater – have already been granted and grandfathered in complex ways to cities, farmers, and industrial users. In some cases, each individual trade of these rights requires governmental approval; other jurisdictions prohibit such trading entirely.

"These restrictions and historical rules have led to highly inefficient allocations. Water may be unavailable to towns that require more of it as they grow, even when those urban and residential uses are a hundred times more valuable than the rural ones they would supplant. Certain industrial firms whose rights are based on historical use may have an incentive to overuse water, even during droughts, to retain their rights to future allotments. Where trading of rights is limited or prohibited, poor price signals make it difficult even to assess which uses are most valuable. And water demand will increase and shift as climate change continues to upend historical usage patterns.

"The success of the US radio spectrum auction points to a solution. Instead of revoking incumbents’ spectrum rights unilaterally, Congress redefined them in a way that made trading them possible and simple, and then allowed TV broadcasters to decide for themselves whether to continue their previous uses or decline to participate. The rights that were sold were then reconfigured to be suitable for new uses and efficient trading, while those that were unsold remained fit for existing purposes."

Hugo Sonnenschein (1940-2021)

 A chain of emails originating from U. Chicago brings the news that Hugo Sonnenschein has died.

Along with his many accomplishments as an economic theorist and then as a university administrator, he was a mentor to many, both formally and informally.  

Among the famous economists whose dissertations he supervised (taken from Wikipedia) are  John Roberts, Salvador Barbera, Dilip Abreu, Faruk Gul, Matt Jackson, Vijay Krishna, and Phil Reny.

Here's the list of Hugo's students from the Mathematics Genealogy Project: Abreu, Dilip; Barbera, Salvador; Cho, In-Koo; Dudey, Marc; Fang, Ryan; Fiaccadori, Marco; Gul, Faruk; Krishna, Vijay; Mailath, George; Mardones, Felipe; McLennan, Andrew; Nava, Francesco; Novshek, William; Pearce, David; Reny, Philip; Resende, Jose; Roberts, Donald; Santamaria, Martin; Simon, Leo; Sontheimer, Kevin; Spiegel, Matthew; Vincent, Daniel

The U. Chicago obit is at the link above. Here's Hugo's Wikipedia page that also focuses on his presidency at the University of Chicago. 

Here's Hugo's page at the History of Economic Thought project, which focuses on his contributions to general equilibrium theory and social choice.

Here's his cv.

Before becoming president of U. Chicago, Hugo was Princeton's provost. Some of the changes he instituted at Chicago were controversial among those who feared that they would make Chicago more like Princeton. Here's the Chicago Sun Times on that:

Hugh Sonnenschein, controversial former University of Chicago president, dead at 80.  He drew criticism from students and scholars including Saul Bellow for a university push to expand enrollment and cut the number of required courses to let students take more electives.

 

I first encountered Hugo in his capacity as Editor of Econometrica from 1977-1984.  He was the editor who brought game theory into Econometrica, and so he played a big role in making Economics the principle home of game theory since then.

Hugo Sonnenschein in 2017

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Update: here's a longer, less hurried obit from U. Chicago

Hugo Sonnenschein, 11th president of the University of Chicago, 1940-2021

and here is one from the Barcelona School of Economics:

In memoriam: Hugo Sonnenschein (1940-2021)

Xenotransplantation is still just around the corner. But maybe it won't always be...

 Xenotransplantation, e.g.. transplanting pig kidneys into humans, sometimes seems like it is just around the corner and always will be.  But a recent review in the journal Xenotransplantation suggests that we might see clinical trials in the almost foreseeable future:

Recent progress and remaining hurdles toward clinical xenotransplantation  

by Raphael P.H. Meier, Alban Longchamp, Muhammad Mohiuddin, Oriol Manuel, Georgios Vrakas, Daniel G. Maluf, Leo H. Buhler, Yannick D. Muller, Manuel Pascual

First published: 23 March 2021 https://doi.org/10.1111/xen.12681

"Background: Xenotransplantation has made tremendous progress over the last decade.

...

Results: Life sustaining genetically modified kidney xenografts can now last for approximately 500 days and orthotopic heart xenografts for 200 days in non-human primates. Anti-swine specific antibody screening, preemptive desensitization protocols, complement inhibition and targeted immunosuppression are currently being adapted to xenotransplantation with the hope to achieve better control of antibody-mediated rejection (AMR) and improve xenograft longevity. These newest advances could probably facilitate future clinical trials, a significant step for the medical community, given that dialysis remains difficult for many patients and can have prohibitive costs. Performing a successful pig-to-human clinical kidney xenograft, that could last for more than a year after transplant, seems feasible but it still has significant potential hurdles to overcome. The risk/benefit balance is progressively reaching an acceptable equilibrium for future human recipients, e.g. those with a life expectancy inferior to two years. The ultimate question at this stage would be to determine if a “proof of concept” in humans is desirable, or whether further experimental/pre-clinical advances are still needed to demonstrate longer xenograft survival in non-human primates."

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In Greek mythology, a chimera is an animal with a lion's head, a goat's body, and a serpent's tail. In medicine the term has been adopted to mean a person who has cells with two different genetic origins (so twins may come to share some of their twin's cells in the placenta).  Here's the picture from the cover of the journal  in which the above article appears:

 

Increasing living donor liver transplantation: liver exchange and other options

 Here's an early online paper from the journal Liver Transplantation.

Can living donor liver transplant in the United States reach its potential?  by Alyson Kaplan, Russell Rosenblatt, Benjamin Samstein, Robert S. Brown Jr., 

First published: 26 June 2021 https://doi.org/10.1002/lt.26220   

Abstract: Living donor liver transplantation (LDLT) is a vital tool to address the growing organ shortage in the United States caused by increasing numbers of patients diagnosed with end-stage liver disease. LDLT still only makes up a very small proportion of all liver transplants performed each year, but there are many innovations taking place in the field that may increase its acceptance amongst both transplant programs and patients. These innovations include ways to improve access to LDLT, such as through non-directed donation, paired exchange, transplant chains, transplant of ABO-incompatible donors, and transplant in high MELD patients. Surgical innovations, such as laparoscopic donor hepatectomy, robotic hepatectomy and portal flow modulation, are also increasingly being implemented. Policy changes, including decreasing the financial burden associated with LDLT, may make it a more feasible option for a wider range of patients. Lastly, center-level behavior, such as ensuring surgical expertise and providing culturally competent education, will help towards LDLT expansion. While it is challenging to know which of these innovations will take hold, we are already seeing LDLT numbers improve within the last two years.

Workshop on Behavioral Game Theory, University of East Anglia, July 15-16

 Here's the announcement:

"Our annual Workshop on Behavioral Game Theory offers leading researchers the opportunity to present current experimental research related to the topic of game theory: the study of strategic interaction using methods of game theory, experimental economics and psychology.  

"The workshop will last for two days on 15 and 16 July. There will be twenty invited speakers along with three plenary talks (see further information below).  

...

"Speakers:

Daniel Friedman, UC Santa Cruz; Yaroslav Rosokha, Purdue University; Heinrich Nax, University of Zurich; Frank Heinemann, TU Berlin; Friederike Mengel, University of Essex; Andis Sofianos, University of Heidelberg; David Gill, Purdue University; Tridib Sharma, ITAM; Alexander Brown, Texas A&M University; Tatiana Kornienko, University of Edinburgh; Xiaomin Li, Caltech; Emanuel Vespa, University of California, San Diego; Evan Calford, Australian National University; Chiara Aina, University of Zurich; Yuval Heller, Bar-Ilan University; Alistair Wilson, University of Pittsburgh; Andy Brownback, University of Arkansas; Manuel Munoz-Herrera, NYU Abu Dhabi; David J Cooper, Florida State University & University of East Anglia; Filippo Massari, University of East Anglia; 

Plenary Speakers: Cristina Bicchieri, University of Pennsylvania; Yan Chen, University of Michigan; Jörgen Weibull, Stockholm School of Economics

Congestion in transit in supply chains: pipeline inventory

 The recovery from the pandemic is revealing as many supply issues as the pandemic itself did. Here's an article in Forbes about congestion in transportation

How Traffic Congestion In Chicago Is Backing Things Up In Los Angeles: Pipeline Inventory Is Now A Big Logistics Problem  by Willy Shih 

"As retailers try to bring a surge of imports into their distribution centers, they are exceeding the capacity of logistics providers to move them through choked hubs like the Union Pacific Global 4 intermodal terminal in Joliet, Illinois outside of Chicago. A shortage of truck chassis means its difficult to get containers out of the terminal to warehouses, that in turn leads to congestion that makes it is difficult to unload trains. According to a recent discussion hosted by the Journal of Commerce on top importers, that means the traffic has backed up to the marine terminals in Los Angeles and Long Beach, and to a lesser extent Seattle/Tacoma. That’s why now would be a good time to understand what we mean by pipeline inventory.

...

"All those containers stuck at UP Global 4 are pipeline inventory for somebody, and rail congestion out of West Coast ports means pipeline inventory is building up there (and remember it’s on trucks and trains as well). The Port of Los Angeles Signal report for last week projects import volumes up 54.9% this week and 71.6% next week, with big jumps in on-dock and off-dock rail containers. So that furniture or freezer you are waiting for might be sitting in a container stack in a yard somewhere.

...

"The key question is will those goods stuck in pipeline inventory make it to the consumer while the demand is still there? The recent precipitous collapse in lumber prices suggests that as Americans shift towards a more normal consumption pattern, we might end up with a lot more of some goods than retailers planned. Neglect of pipeline inventory, or increased ordering to make up for the pipeline lag, is one of the major causes of the bullwhip effect in supply chains. Sophisticated retailers like Walmart or Target are probably always on top of how much inventory they have in the pipeline, but the challenge is will the demand still be there when those goods finally arrive? For fashion retailers, this could be “Hello, TJX” as they end up looking for help to liquidate excess inventory."

College admissions: Oxford and Cambridge

 The Financial Times has the story:

How Britain’s private schools lost their grip on Oxbridge. As state-school admissions rise at elite universities, some parents who shelled out for private education regret it.  by Brooke Masters

Vouchers in kidney exchange chains: a report of initial experience at NKR

 Here's a report of the experience with kidney vouchers, pioneered at UCLA and the National Kidney Registry. That's a policy that has now spread more widely, in the U.S.  This paper reports data from the NKR for 2014 through January 2021, during which time 250 donors were given vouchers, 6 of which have so far been redeemed. Voucher donors start kidney exchange chains (like non-directed donors) that can later be redeemed by (e.g.) their family members.

Voucher-Based Kidney Donation and Redemption for Future Transplant, by Jeffrey L. Veale, MD1; Nima Nassiri, MD2; Alexander M. Capron, JD2,3; Gabriel M. Danovitch, MD1; H. Albin Gritsch, MD1; Matthew Cooper, MD4,5; Robert R. Redfield, MD6; Peter T. Kennealey, MD7; Sandip Kapur, MD8

JAMA Surg. Published online June 23, 2021. doi:10.1001/jamasurg.2021.2375

"Abstract:

Importance  Policy makers, transplant professionals, and patient organizations agree that there is a need to increase the number of kidney transplants by facilitating living donation. Vouchers for future transplant provide a means of overcoming the chronological incompatibility that occurs when the ideal time for living donation differs from the time at which the intended recipient actually needs a transplant. However, uncertainty remains regarding the actual change in the number of living kidney donors associated with voucher programs and the capability of voucher redemptions to produce timely transplants.

...

Design, Setting, and Participants  This multicenter cohort study of 79 transplant centers across the US used data from the National Kidney Registry from January 1, 2014, to January 31, 2021, to identify all family vouchers and patterns in downstream kidney-paired donations. The analysis included living kidney donors and recipients participating in the National Kidney Registry family voucher program.

Exposures  A voucher was provided to the intended recipient at the time of donation. Vouchers had no cash value and could not be sold, bartered, or transferred to another person. When a voucher was redeemed, a living donation chain was used to return a kidney to the voucher holder.

Main Outcomes and Measures  Deidentified demographic and clinical data from each kidney donation were evaluated, including the downstream patterns in kidney-paired donation. Voucher redemptions were separately evaluated and analyzed.

Results  Between 2014 and 2021, 250 family voucher–based donations were facilitated. Each donation precipitated a transplant chain with a mean (SD) length of 2.3 (1.6) downstream kidney transplants, facilitating 573 total transplants. Of those, 111 transplants (19.4%) were performed in highly sensitized recipients. Among 250 voucher donors, the median age was 46 years (range, 19-78 years), and 157 donors (62.8%) were female, 241 (96.4%) were White, and 104 (41.6%) had blood type O. Over a 7-year period, the waiting time for those in the National Kidney Registry exchange pool decreased by more than 3 months. Six vouchers were redeemed, and 3 of those redemptions were among individuals with blood type O. The time from voucher redemption to kidney transplant ranged from 36 to 155 days.

Conclusions and Relevance  In this study, the family voucher program appeared to mitigate a major disincentive to living kidney donation, namely the reluctance to donate a kidney in the present that could be redeemed in the future if needed. The program facilitated kidney donations that may not otherwise have occurred. All 6 of the redeemed vouchers produced timely kidney transplants, indicating the capability of the voucher program."

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I haven't managed to sign a data use agreement with NKR, because Stanford's policies don't allow researchers to cede editorial control of the final paper to the data owners, which NKR's agreement requires.  See earlier post:

Thursday, March 18, 2021

Data use agreements, and university research policies regarding restrictions on publication

Fishery regulation involves onboard observers at sea--a very dangerous job

 Next time you eat a salt water fish, spare a thought for how fisheries are regulated to keep them viable as a common pool resource.  There are catch limits, whose enforcement requires deep sea fishing boats to have onboard inspectors, called observers.  Apparently that's a dangerous job.

The Guardian has the story:

Death at sea: the fisheries inspectors who never came home.  by Bernadette Carreon 

"Being an observer, which involves monitoring fishing practices and catches to make sure boats follow the rules, is a dangerous job that can put observers in conflict with the crews on the vessels on which they are working, often hundreds, or even thousands, of kilometres from the nearest port.

"According to the Association of Professional Observers, there have been over a dozen cases of observers dying on the job since 2009 alone, including three involving Kiribati nationals."

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The Association of Professional Observers maintains a site that includes a page on Observer Deaths and Disappearances, as well as one on Harassment of observers, for example in ways that may compromise their data. 

Kidney exchange, arranged the old fashioned way

 Before the modern organization of kidney exchange developed in the early years of this century, using databases and algorithms, and connecting potentially widely dispersed patients and donors, a literal handful of kidney exchanges were arranged by hand and happenstance.  Alongside the thousands of exchanges that now happen, happenstance can still happen too. Here's a recent story from the Washington Post:

Two women chatted in a bathroom. They soon realized they were each a match for the other’s husband, who needed a kidney.  By Cathy Free

"Antibody tests revealed that each woman was an excellent match for the other’s spouse.

"So in March, seven months after that chance conversation, Wimbush donated one of her kidneys to Lance Ellis, 41, and Susan Ellis donated one of hers to Rodney Wimbush, 45."

School choice in Austria, by Greiner and Zednik in Die Presse

 Parents have big strategy sets (and can change the address at which a child is registered) to game the school choice system.

In Die Presse (with the help of Google Translate):

Schulplatzallokation und strategisches Eltern-Verhalten, von Ben Greiner und Anita Zednik

[Allocation of school places and strategic parenting behavior by Ben Greiner and Anita Zednik]

"In Austria, economists have not yet often been involved in the design of allocation mechanisms. But here, too, there are many allocation problems that have room for improvement. One problem is the allocation of school places, both in primary and secondary schools. As a rule, only one school can be named as a preference, and many parents are uncertain whether their child has a good enough chance of being accepted at the most preferred school. As a result, parents often choose a safer school near where they live instead of enrolling their child in their favorite school. However, this uncertainty also leads to dishonest strategic behavior on the part of parents. Some parents change their child's address before registering for school, to secure higher chances of getting a place at your favorite school.

...

"Dr. Anita Zednik from the Vienna University of Economics and Business presented a study based on Viennese registration data that empirically documents such strategic behavior on the part of parents. Dr. Zednik analyzes the anonymized registration data of more than 300,000 Viennese children between September 2016 and August 2020 and identifies “moving back and forth”, i.e. cases in which a child registered at a different address in Vienna before registering and then returned to the original address after registering

...

"This strategic behavior also leads to more inequality in the distribution of school places. For children with a migration background and from households in which their parents do not have a university degree, proportionally significantly fewer moves back and forth are observed than for children with Austrian citizenship and from households with higher educational qualifications. The data show that it is time to take a closer look at the Austrian mechanisms for allocating school places. "

An interview in (not on) Clinical Orthopaedics and Related Research, largely about resident matching

 For those  readers of this blog who may have missed the May issue of Clinical Orthopaedics and Related Research, here's an interview by the editor

A Conversation with ... Alvin E. Roth PhD, Economist, Game Theorist, and Nobel Laureate Who Improved the Modern Residency Match  by Leopold, Seth S. MD, Clinical Orthopaedics and Related Research, Volume 479(5), May 2021, p 863-866   doi: 10.1097/CORR.0000000000001758

The interview includes this long answer to a short question about the resident Match:

Seth S. Leopold MD: Many readers will dispute the idea that the Match is resistant to strategic manipulation (“gaming the system”); why do you believe it is, and why do you think this perception persists?

Alvin E. Roth PhD: That question requires a somewhat complicated answer. The Match is built around an idea of how to organize a simple labor market, and that idea had to be adapted to the complex structure of the modern medical labor force. A simple labor market would be one in which graduating medical students each seek a single position, positions are well described in advance, and applicants and residency programs can each rank-order all of their possible matches; that is, applicants can rank programs and programs can rank applicants. That simple market can be modeled mathematically, and it can be shown that a deferred acceptance algorithm with applicants proposing makes it a dominant strategy for all applicants to submit rank-order lists corresponding to their true preferences. (A dominant strategy is one in which regardless of what rank-order lists others submit, no applicant can do better than to rank residency programs in order of his or her true preferences. For instance, your chance of getting your second-choice program if your first choice rejects you is exactly the same as if you had listed your second choice first.)

"That’s a theoretical answer about a market that is quite a bit simpler than the modern market for residencies. The deferred acceptance algorithm for that simple market was studied by Gale and Shapley [8], for which Shapley shared the 2012 Nobel Prize in Economics. (I had earlier shown that in a simple market, applicants can’t profitably manipulate their rank-order lists [16].)

"The actual modern market for residencies differs from that simple market in several ways. For one thing, not all applicants are seeking a single position. This can happen for several reasons, the most important of which is that couples can enter the Match looking for pairs of jobs; in 2020, for example, more than one thousand couples submitted rank-order lists consisting of pairs of jobs. There are also many more residency programs than an applicant can submit on a rank-order list, and many more applicants than programs can interview, so decisions have to be made beforehand that are more complicated than how to order the rank-order list. These complications may also add to confusion about the Match and about how the Match algorithm works.

"Computational studies of the Match nevertheless confirm that once interviews are over and an applicant has decided what programs to apply to, it is perfectly safe to submit a rank-order list that corresponds to the applicant’s true preferences [18]. To put it another way, there is no advantage to submitting a rank-order list that differs from an applicant’s preferences (and there is a danger in submitting a different rank-order list, because the Match will use the submitted list to make matches, in order).

"This fact doesn’t seem to have yet penetrated to everyone who participates in the Match [13]. For this reason, all those who advise medical students entering the Match should increase their advising efforts around this point.

"Note that the Match is only the final part of the transition to residency (or to fellowships). That transition starts with applications and interviews and includes various kinds of signals, like exam scores and transcripts and letters of reference. While the dominant-strategy property of the Match makes that part of the process strategically simple (that is, we can confidently advise students to submit rank-order lists in order of their true preferences), the other parts of the process (what rotations to take before applying, where to apply, how to conduct yourself at interviews) are not simple at all."

NRMP Position Statement On The (In)Feasibility Of An Early Match

 There has been some suggestion that dividing the resident match into early and late matches might be a way to address the congestion in applications and interviews that has bedeviled the transition from medical school to residency in recent years.  The NRMP now has a statement pointing out that there are serious problems with that idea.

NRMP Position Statement On The Feasibility Of An Early Match

"For the past eighteen months the National Resident Matching Program® (NRMP®) has been working closely with other national medical education organizations to examine the current state of the transition to residency. Conversations have focused on mitigating burdens for both applicants and programs in the selection and recruitment process and addressing uncertainty in the future of the interview cycle.

...

"Among the proposed solutions to current challenges in the transition to residency are calls for an early match. Specifically, NRMP has been asked to implement the Early Result and Acceptance Program (ERAP) pilot program proposed for Obstetrics and Gynecology, created through American Medical Association’s Reimagining Residency Grant, “Transforming the UME to GME Transition: Right Resident, Right Program, Ready Day One”. The stated goals of the ERAP pilot are to allow applicants to engage in strategic decision-making, reduce burden on programs while hypothesizing that the change will result in holistic review, and reduce necessary applications and interviews. ERAP calls for an early match to begin in September 2022 for the 2023 Match cycle. ERAP permits applicants to apply to a maximum of three programs in the early match with programs including up to 50% of their positions if they choose to participate. This statement outlines NRMP’s concerns about the structure of the ERAP pilot program, the lack of evidence supporting the proposed changes to the Match, the implications of an early match for the matching process, and preliminary findings of modeling an early match being conducted by experts in market design and the matching algorithm.

"The NRMP has reviewed the ERAP pilot program with consideration for whether changes to the matching process have the potential to inadvertently disadvantage Match participants. It is through that lens NRMP remains concerned with the following aspects of the ERAP pilot:

"Although voluntary, applicants may feel pressured to participate in an early match where up to half the available positions in a specialty may fill before the Main Residency Match® opens.

"There exists no mechanism for demonstrating how an early match will make visible less competitive applicants and those underrepresented in medicine, which is hypothesized in the project document.

"The proposed limit of three applications per applicant could force applicants to make compromises not present in the Match today. ...While the ERAP investigation team hypothesized that the application limit will increase holistic review by programs, there are no mandates to ensure that programs conduct holistic review nor are there restrictions on the number of applications programs may accept, interviews they may offer, or applicants they may rank. With no objective evidence to support the hypothesis, we cannot conclude that the proposed application limit would increase holistic review of applications.

"There exists no mechanism for safeguarding an applicant’s failure to match in the early match from programs as they enter the Main Residency Match, which could result in the applicant being viewed as less competitive.

"In addition to concerns about disadvantaging applicants, NRMP is mindful of possible behavior changes resulting from changes to the Match process that could affect Match outcomes for all Match participants.

• "The structure of an early match does not allow for mixed-specialty couples ranking or multispecialty individual ranking, which may cause applicants to reconsider their specialty choices, fundamentally changing their career path.
• "Programs may have insufficient information (e.g., clinical evaluations, MSPE, LORs) to evaluate applicants fully and fairly in the early match.
• Programs may see a surge in non-traditional applicants as the early match provides three opportunities to enter training through either the early match, the Main Residency Match, or SOAP®. This may result in an increased number of applications or applicants who may otherwise not select the specialty.
• Not matching in the early match is likely to increase the number of applications per individual in the Main Residency Match, as applicants enter a matching cycle with only half of the positions remaining available. This may increase stress, cost, and could adversely affect the wellness of applicants.

...

"it is important to first outline the core concepts of the match as a stable “market”. The Match was established in 1952, to solve a “congestion” problem in medical residencies involving applications, offers, and acceptances. In a May 2021 pre-submission working paper, Itai Ashlagi, Ph.D. and Alvin Roth, Ph.D. describe the consequences of congestion as “unraveling” where programs initially responded to congestion by making “exploding offers” that prevented applicants from considering many programs because they were pressed to accept an early offer, before knowing whether an offer from a more preferred program might be forthcoming if they waited. The authors note that NRMP’s matching process, in its current form, has four distinct properties that are relevant to managing the problems of congestion and unraveling and maintaining a stable matching market. Specifically, the NRMP matching process

"1. Is Uncongested: participants make all decisions (on Rank Order Lists) in advance, so there is no delay in processing offers, rejections, and acceptances, which is done by the computerized Roth-Peranson algorithm.

"2. Defers acceptances: preferences of applicants and programs are not finalized until all preferences have been considered, thereby producing stable matching: i.e., matching in which there are no “blocking pairs” of applicants and programs not matched to one another but who both would prefer to be.

"3. Promotes true preferences: it is safe for participants to state their true preferences when they submit their Rank Order Lists (ROLs).

"4. Establishes a “thick” market: most residency programs in most specialties participate in the NRMP Match, which also allows for multi-specialty applications and couple matching (including for mixed-specialty couples).

"The authors opine that an early match such as the proposed ERAP pilot followed by the Main Residency Match would not share three of the four important properties of the Match:

"1. An early match would dilute the thick market: not all positions would be available at the same time (and further, it would not allow applicants to express multi-specialty preferences, nor would it accommodate mixed-specialty couples).

"2. early match would introduce complicated strategic decisions into the formulation of ROLs: it would no longer be safe for participants to submit ROLs straightforwardly corresponding to their preferences.

"3. An early match would not produce a stable matching: there would be mutually disappointed blocking pairs of mismatched applicants and programs. This would also make it less safe to report ROLs that straightforwardly corresponded to preferences."

Trans as a gender identity

 New freedoms continue to be recognized.

It is not so long ago that sexual orientation and then same sex marriage were at the forefront of the cultural clash between individual rights and freedoms, and social repugnance.  Those battles aren't over, but the rights of individuals to love who they love have won important legal and cultural battles.

Lately, sexual identity is drawing increasing attention, with a growing recognition that some people's brains aren't wired the way their genitalia would suggest.  Two articles in the NY Times help (me at least) to understand some of the issues.

The first is written under a pseudonym by the mom of a transgender child, who notes that many people are trans starting as young children.  The second, by a trans man, argues that we should think of transgender a a gender identity of its own, not as a transition from one traditional gender to another. 

Where in the World Are All the Trans Children? Everywhere. By Marlo Mack

"I learned that while many transgender people do not transition until adolescence or adulthood, significant numbers of young children are aware of their gender identity from a very young age. Dr. Kristina Olson, a psychologist at Princeton University who studies gender development in children, says, “Research shows that there are a set of trans people who first identify with their gender by the toddler or preschool years and continue to do so throughout their lives.”

...

"But if transgender children are a global phenomenon, so are their struggles. Just as in the United States, parents who have spoken publicly are often harassed and threatened. (For safety reasons, I am not naming them.) Nearly all saw relationships with friends and family members disintegrate when their children came out as trans. Several families immigrated to countries that felt safer for their children. “When my daughter is older,” said one mother who left Mexico for the United States, “I’ll tell her the real reason we left.”

"These kinds of moves are likely to become more common, as courts and legislatures around the United States and in other countries chip away at transgender rights, restricting access to gender-affirming (and lifesaving) medical care for children like mine. On my social media feed, parents around the world are asking one another: Where can we go now? Where will my child be safe?

"It is not always easy to stay hopeful while raising a transgender child in a world that so rarely chooses to welcome her. I wonder what I would do if my own state passed a law making her medical care illegal. I worry about where she will be able to live and travel safely when she is older. I worry about the children who live in places where being transgender remains a crime.

"Yet I am hopeful, because I have witnessed the ferocious, protective love of parents around the world. And that is not a liberal Western fad."

************

What I Saw in My First 10 Years on Testosterone  By Thomas Page McBee

"I also wanted it known that despite the media fixation on a trite narrative about what it meant to be trans, I was not “a man trapped in a woman’s body or any cliché like that,” as I emailed my friends and family. I was a man and I was born trans, and I could hold both of those realities without an explanation that could be written on the back of a napkin.

“I will not become a different person,” I wrote in that email, defiantly and, as it turns out, correctly. “I am myself. I just want to feel more like me.”

The art of money laundering through the art market

 What looks like privacy to some looks like secrecy to others.

The NY Times has the story:

As Money Launderers Buy Dalís, U.S. Looks at Lifting the Veil on Art Sales. Secrecy has long been part of the art market’s mystique, but now lawmakers say they fear it fosters abuses and should be addressed.  By Graham Bowley

"Billions of dollars of art changes hands every year with little or no public scrutiny. Buyers typically have no idea where the work they are purchasing is coming from. Sellers are similarly in the dark about where a work is going. And none of the purchasing requires the filing of paperwork that would allow regulators to easily track art sales or profits, a distinct difference from the way the government can review the transfer of other substantial assets, like stocks or real estate.

...

"In January, Congress extended federal anti-money laundering regulations, designed to govern the banking industry, to antiquities dealers. The legislation required the Department of the Treasury to join with other agencies to study whether the stricter regulations should be imposed on the wider art market as well. The U.S. effort follows laws recently adopted in Europe, where dealers and auction houses must now determine the identity of their clients and check the source of their wealth.

“Secrecy, anonymity and a lack of regulation create an environment ripe for laundering money and evading sanctions,” the U.S. Senate’s Permanent Subcommittee on Investigations said in a report last July in support of increased scrutiny.

"To art world veterans, who associate anonymity with discretion, tradition and class, not duplicity, this siege on secrecy is an overreaction that will damage the market. They worry about alienating customers with probing questions when they say there is scant evidence of abuse.

...

"What is the origin of such secrecy? Experts say it likely dates to the earliest days of the art market in the 15th and 16th centuries when the Guilds of St. Luke, professional trade organizations, began to regulate the production and sale of art in Europe. Until then, art was not so much sold as commissioned by aristocratic or clerical patrons. But as a merchant class expanded, so did an art market, operating from workshops and public stalls in cities like Antwerp. To thwart competitors, it made sense to conceal the identity of one’s clients so they could not be stolen, or to keep secret what they charged one customer so they could charge another client a different price, incentives to guard information that persist today.

...

"Auction catalogs say works are from “a private collection,” often nothing more. Paintings are at times brought to market by representatives of owners whose identities are unknown, even to the galleries arranging the sale, experts and officials say. Purchasers use surrogates, too. 

************

Here's a related State Department report on how art sales have been used to circumvent U.S. sanctions on Russian oligarchs:

THE ART INDUSTRY AND U.S. POLICIES THAT UNDERMINE SANCTIONS.  STAFF REPORT, PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, UNITED STATES SENATE

International (Stonybrook) Virtual Conference on Game Theory July 5 - 8, 2021

  The program this year looks unusually great. (If it doesn't show up well on mobile, click on the link instead...)  The event is hosted by Virtual Chair and will take place on the Gather.town platform.

International Conference on Game Theory

July 5 - 8, 2021

All times in Eastern Time (GMT -4)

Click on the talk title for more information.

Monday, July 05
09:30 - 10:00	Breakfast
10:00 - 10:30	Jon Kleinberg  (Cornell University) Algorithmic Monoculture and Social Welfare
10:30 - 11:00	Annie Liang  (Northwestern University) Data and Incentives
11:00 - 11:15	Break
11:15 - 11:45	Navin Kartik  (Columbia University) Improving Information from Manipulable Data
11:45 - 13:00	Poster Session
13:00 - 14:00	Robert Wilson  (Stanford University) Large Auctions
14:00 - 14:15	Break
14:15 - 14:45	Peter Cramton  (University of Cologne) Lessons from the 2021 Texas electricity crisis
14:45 - 15:15	Srihari Govindan  (University of Rochester) Toward an Axiomatic Theory of Stability
15:15 - 16:15	Reception for Robert Wilson

 

Tuesday, July 06
09:30 - 10:00	Breakfast
10:00 - 10:30	Michael Kearns  (University of Pennsylvania) Between Group and Individual Fairness for Machine Learning
10:30 - 11:00	Rediet Abebe  (University of California, Berkeley) TBA
11:00 - 11:15	Break
11:15 - 11:45	Jamie Morgenstern  (University of Washington) TBA
11:45 - 12:15	Irene Lo  (Stanford University) TBA
12:15 - 13:00	Meet the Speakers (Monday and Tuesday)
13:00 - 14:00	Jean Tirole  (Tolouse School of Economics) Safe Spaces: Shelters or Tribes?
14:00 - 14:15	Break
14:15 - 14:45	Éva Tardos  (Cornell University) The Virtue of Patience in Strategic Queueing Systems
14:45 - 15:15	Stephen Morris  (MIT) Conflation of Impressions: Market Thickness versus Efficiency

 

Wednesday, July 07
09:30 - 10:00	Breakfast
10:00 - 10:30	Maria-Florina Balcan  (Carnegie Mellon University) TBA
10:30 - 11:00	Benjamin Brooks  (University of Chicago) A Strong Minimax Theorem for Informationally-Robust Auction Design
11:00 - 11:15	Break
11:15 - 11:45	Daniela Saban  (Stanford University) TBA
11:45 - 13:00	Poster Session
13:00 - 13:30	Michael Jordan  (University of California, Berkeley) On Dynamics-Informed Blending of Machine Learning and Game Theory
13:30 - 14:00	Moshe Tennenholtz  (Technion--Israel Institute of Technology) Data Science with Game Theory Flavor
14:00 - 14:15	Break
14:15 - 14:45	Renato Paes Leme  (Google Research) Interactive Communication in Bilateral Trade
14:45 - 15:15	Constantinos Daskalakis  (MIT) TBA

 

Thursday, July 08
09:30 - 10:00	Breakfast
10:00 - 10:30	Marina Halac  (Yale University) Monitoring Teams
10:30 - 11:00	Eran Shmaya  (Stony Brook University) TBA
11:00 - 11:15	Break
11:15 - 11:45	Yiling Chen  (Harvard University) TBA
11:45 - 12:15	Tim Roughgarden  (Columbia University) Transaction Fee Mechanism Design
12:15 - 13:00	Meet the Speakers (Wednesday and Thursday)
13:00 - 14:00	Paul Milgrom  (Stanford University) Reprise of Nobel lecture (Auction Research Evolving: Theorems and Market Designs)
14:00 - 14:15	Break
14:15 - 14:45	Shengwu Li  (Harvard University) Investment Incentives in Near-Optimal Mechanisms
14:45 - 15:15	Susan Athey  (Stanford University) TBA
15:15 - 16:15	Reception for Paul Milgrom

Data for the people: Emily Oster in the NY Times

The NY Times writes about Emily Oster, who has pioneered a new way for an economist to be a public intellectual, by bringing to a general audience her skills at assembling and interpreting data on a wide variety of subjects, including parenting (is it ok to drink a glass of wine while pregnant?) and the Covid pandemic (how to decide when schools should reopen?)

She Fought to Reopen Schools, Becoming a Hero and a Villain. The economist Emily Oster offers loads of data-driven advice about children and Covid-19. Many parents live by her words. Others say she’s dangerous. By Dana Goldstein

"This steady stream of counterintuitive advice has made Dr. Oster a lodestar for a certain set of parents, generally college-educated, liberal and affluent. Many had first latched onto her data-driven child-rearing books. Her popularity grew during the pandemic, as she collected case counts of Covid-19 in schools and advanced her own strongly held views on the importance of returning to in-person learning.

"Some parents said, half-seriously, “Emily Oster is my C.D.C.”

"But others — teachers, epidemiologists and labor activists — criticized her, pointing out that she was not an infectious disease expert, nor did she have any deep personal or professional experience with public education. "